Regulator sets higher rooftop solar target, no changes to price

The Clean Energy Regulator has set a significantly higher target for certificates created by the small-scale renewable technology scheme, following the largely unexpected boom in rooftop solar in 2018.

The CER on Tuesday said the new target for 2019 would be 37 million certificates (STCs), which act as an up-front rebate on the cost of rooftop solar installations up to 100kW (and other small-scale renewable energy technologies too).

It is the highest target set since the start of the scheme in 2011, when a high “multiplier” resulted in an initial target of 28 million. The increase from 22 million in 2018 was widely expected after big growth in rooftop solar installations in 2018, when a record amount of 1.6GW was added to the grid.

“The calculated increase for 2019 is due to significantly more STCs being created in 2018 than projected and expected growth in STC creations in 2019, mainly from rooftop photovoltaic systems,” the regulator said.

But despite calls for the scheme to be scrapped, and fears in some quarters that the “clearing house” price of $40/MWh could be wound back, it appears to have been largely untouched.

Analysts say that the STC market had been operating under a cloud of uncertainty about whether government might reduce the clearing house price, particularly as it came under fire from trumped up claims in the Murdoch press – parroted widely by other media – about the cost of the system.

The Murdoch media claimed that the STC costs each household $200 a year. In fact, according to the Australian Energy Market Commission, it costs $32 a year. And while the increased target for 2019 may result in an rise in that cost, it would only be a few dollars.

And that does not include the benefits of rooftop solar, and its role in reducing the size of system peaks, pushing those peaks further into the evening, and lowering wholesale electricity prices.

Rooftop solar is also expected to form the basis of a major shift to a “decentralised” energy system, where around half of capacity and demand will be met by “distributed” resources such as solar, battery storage, electric vehicles and demand management.

Analysts said that the announcement from the CER should be seen as good news for the SRES, even though the target is front loaded and could cause “tightness” in the market in the first quarter.

The rebate is being progressively rolled back each year, and will be eliminated by 2030.

Some, however, such as the Australian Competition and Consumer Commission, supported by big utilities like Origin Energy and EnergyAustralia, have argued that it should be scrapped, saying that the cost of solar has come down enough.

Defenders of the rebate say that it means solar can now be sourced more easily by those on low to medium incomes, who already account for the lion’s share of the uptake of rooftop solar. And it makes it easier to design schemes that allow access to renters and apartment dwellers.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.